Saturday 27 March 2010 20.05 EDT
First published on Saturday 27 March 2010 20.05 EDT

For reasons that need not detain us, I found myself watching Alistair Darling's budget speech in El Vino's wine bar, Blackfriars, London. I say "watching" because a few City types were there who did not seem at all interested in whether the chancellor was going to clobber them, and it was difficult to hear what was being said. In effect, I saw a silent movie, with subtitles of various measures and soundbites flashed across the screen.

I found myself devoting more attention to the expressions on MPs' faces than usual. And I fear that the outstanding impression was that half the time the prime minister looked as if he was asleep. This could have been because he knew the text backwards, having interfered with it in the way people says he does. Certainly, those who have concluded that the budget was very "political" have good grounds for doing so. As my West Country correspondent points out, there are few votes for Labour in the cider-producing counties. Then there was the way that stamp duty was raised on those who can well afford it, and eased lower down the wealth (or poverty) scale. And it is planned that they will go ahead with a 50% top tax rate for those on £150,000 a year and above.

But some pre-election budgets are more shameless than others, and this was a very responsible budget at the macro level. Despite inevitable grumbling from predictable quarters, the chancellor has not bowed to what was widely reported as pressure from No 10 to concentrate more on investment and less on debt repayment – or, should we say at this stage, less borrowing.

He is now planning – or trying to commit his successor(s) to plan – for reducing the budget deficit by more than half over four years. Before, the commitment was simply (!) to halve it, but he wants to use the improved prospect for revenue – an improvement of £11bn is not to be sniffed at in hard times – for lowering the debt. Indeed, out of a gross national product approaching £1.5tn, a budget which "costs" less than £1.4bn in the financial year 2010-2011 is chickenfeed.

If anything, my worry is that Darling, far from frightening the horses belonging to a financial sector that nearly brought the economy down, is being almost too "responsible".

Despite the "political" gestures he has made, this goes down as one of the least shameful pre-election budgets in living memory. Reginald Maudling's reckless 1964 budget, designed entirely with the objective of winning the election – and it nearly did – landed the Wilson governments of 1964-70 with what was in those days a huge balance of payments deficit, which was the dominant background to that government's difficulties with the economy.

By contrast, the famous budget of 1970 introduced by Roy Jenkins was considered so "responsible" as to have been responsible for Labour's defeat in that year's general election. In fact, elements of the Labour party completely rewrote the history of that period because Jenkins's budget was quite popular. After it, Labour went ahead in the polls for the first time in two years, but were victims of an ill-timed election after the announcement of some freakishly bad trade figures.

In 1987 my old friend Nigel Lawson introduced a shamelessly electioneering budget – 2p off income tax to 27p – in the face of a roaring consumer boom. The election result was no problem: the problems arose later, and the boom gave way to the bust of 1990-92.

The finances were repaired under the chancellorship of Kenneth Clarke (1993-97), though some of the groundwork for "stability" was done under the latter phase of Norman Lamont's 1990‑92 chancellorship, in the aftermath of Black Wednesday.

Gordon Brown promised us "no more Tory boom and bust"; instead we got what turned out to be Labour boom and bust. But the fact that things were going wrong before the financial crises of 2007-8, and the economic annus horribilis of 2009, does not justify the deficit hysteria we are now witnessing.

In the early 1980s I coined the term "sado-monetarism" to describe the excesses of too restrictive a monetary policy, with all the economic, industrial and social damage that caused. Although deficits obviously have to be reduced, and the intention is there, if not all of the savage detail, we are now seeing an era of "fiscal masochism".

A couple of days before the budget I heard the Governor of the Bank of England address the Royal Society on the subject of "Uncertainty in macroeconomic policymaking – art or science?". In the chair was the eminent meteorologist Professor Tim Palmer. At one stage Mervyn King observed: "Uncertainty can't change the weather but it can affect the economy."

The present economic outlook is, as it were, clouded with uncertainty. The financial crisis hit the economic forecasting profession for six, and the 2010 financial statement and budget report is replete with qualifications about the economic outlook and the forecasts on which the budget strategy depends.

This government is widely considered to have handled the response to the global financial crisis reasonably well. As Alistair Darling could not resist pointing out in his speech, the Conservatives did not distinguish themselves when it came to the policy response to the crisis. And at first I thought Darling's post-budget threat to introduce "deeper and tougher" cuts, in due course, than Thatcher was a slip of the tongue. But now it appears to be a strategy. I think he will live to regret it.